The EU AML ban on privacy-preserving tokens will prohibit banks, credit institutions and crypto-asset service providers from holding anonymous accounts or transacting in privacy-preserving cryptocurrencies from 2027, tightening AMLR enforcement across the bloc and prompting industry-policy negotiations.
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What changes: Banks, CASPs and credit institutions must block anonymous accounts and refrain from handling privacy-preserving tokens.
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When it takes effect: The Anti-Money Laundering Regulation (AMLR) measures become enforceable in 2027.
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Impact data: The ban affects custody, on‑ramps and KYC practices across EU markets and builds on MiCA’s framework.
EU AML ban on privacy-preserving tokens: New rules from 2027 restrict anonymous accounts and private coins—read how stakeholders can engage policymakers now.
What is the EU AML ban on privacy-preserving tokens?
The EU AML ban on privacy-preserving tokens is a provision in the updated Anti-Money Laundering Regulation that will prevent credit institutions, financial institutions and crypto-asset service providers (CASPs) from maintaining anonymous accounts or interacting with privacy-preserving cryptocurrencies beginning in 2027. It extends AMLR enforcement to crypto custody and transactional privacy tools.
How will the ban affect crypto businesses and users?
The ban requires CASPs and regulated financial firms to update KYC, transaction monitoring and custodial policies. Affected entities must either delist privacy-focused assets or implement controls that make truly anonymous holdings infeasible. This will materially alter custody offerings and on‑ramp/off‑ramp compliance across the EU.
Blockchain stakeholders can still negotiate with policymakers on the EU AML framework’s upcoming ban on privacy-preserving tokens, set to go into effect in 2027.
Blockchain industry participants and regulators continue battling for privacy rights as the European Union’s sweeping Anti-Money Laundering (AML) rules look set to ban privacy-preserving tokens and anonymous crypto accounts starting in 2027.
Credit institutions, financial institutions and crypto asset service providers (CASPs) will be prohibited from maintaining anonymous accounts or handling privacy-preserving cryptocurrencies under the EU’s new Anti-Money Laundering Regulation (AMLR) that will go into effect in 2027. Industry reporting and public consultations have emphasized enforcement paths and compliance obligations.
Maintaining the right to access privacy-preserving coins like Monero (XMR) has been a “constant battle” between blockchain industry stakeholders and regulators, according to Anja Blaj, an independent legal consultant and policy expert at the European Crypto Initiative.
“Once you think of how the states want to play out their policies, they want to establish control. They want to understand who the parties are that transact among themselves,” said Blaj in a public panel on Sept. 3, 2025.
“[The state] wants to understand that to be able to prevent whatever crime and scamming is happening, and we want to enforce the policies that we create as a society.”
#CHAINREACTION — Zoltan Vardai (September 3, 2025)
Her comments came as the EU ramped up its regulatory oversight over the crypto industry, building on the bloc’s Markets in Crypto-Assets Regulation (MiCA).
Related: Swiss banks complete first blockchain-based legally binding payment
Why is there still room for negotiation?
While the AML framework text is final, regulatory experts note implementation, guidance and enforcement choices remain subject to consultation and interpretation until the rules are active. Policymaking is a continuous conversation, meaning that even published regulation will see clarifications and implementing measures.
“There are still ways to either talk to the regulators, see how it’s going to play out, how it’s going to be enforced,” Blaj said, noting that enforcement posture and technical compliance standards can be shaped by stakeholder input.
The regulation concerning privacy-preserving cryptocurrencies is becoming stricter because it conflicts with states’ priorities for traceability and prevention of illicit finance, she added.
Related: Bitcoin whale awakens after 12 years, transfers 1,000 BTC before US Fed meeting
The push against crypto privacy comes as a broader digital surveillance proposal known as “Chat Control” regains political momentum. The plan would require platforms to scan user content, raising civil liberties questions. Fifteen member states support the bill but it has not yet reached the 65% population threshold required for adoption; Germany remains cautious.
When should stakeholders act?
Stakeholders should prepare technical briefs, regulatory impact assessments and coordinated policy submissions now to influence implementing measures and enforcement guidance between publication and the 2027 effective date. Early pilots and supervised experiments can demonstrate workable controls without full prohibitions.
Comparative impact table
| Entity | Primary Restriction | Operational Impact |
|---|---|---|
| Credit institutions | No anonymous accounts | Stricter KYC, account closure where anonymity detected |
| CASPs (exchanges, custodians) | Ban on handling privacy-preserving tokens | Delisting or stringent compliance controls; custody model changes |
| Users | Limited on‑ramp for private coins | Reduced access to privacy-preserving assets via regulated channels |
Frequently Asked Questions
How can CASPs comply while serving user privacy needs?
CASPs can document risk-based approaches, propose monitored pilot programs and invest in analytics that balance transaction privacy with traceability needs. Engagement with national regulators early can identify acceptable technical mitigations.
What are the enforcement timelines for the AMLR provisions?
Implementation and supervisory guidance will be clarified between now and 2027; member states and supervisory authorities will issue guidance and enforcement timelines as they prepare for the regulation’s entry into force.
Key Takeaways
- AMLR change is imminent: The EU will restrict anonymous accounts and privacy-preserving token handling from 2027.
- Negotiation window exists: Industry can still influence implementation through coordinated engagement and technical proposals.
- Operational impact is broad: CASPs, banks and users will face KYC, custody and access changes; pilots and audits should begin now.
Conclusion
The EU AML ban on privacy-preserving tokens marks a decisive regulatory shift that will reshape custody, compliance and user access to privacy-focused assets by 2027. Industry stakeholders should prioritize technical documentation, coordinated policy submissions and pilot programs to inform enforcement choices and preserve legal avenues for privacy-preserving innovation where feasible. COINOTAG will continue to monitor developments and publish updates as regulators and markets respond.
